Qantas to split international and domestic divisions

Passengers at Qantas check-in counters The firm's international operations have been hurt by a variety of issues including strikes in recent times

Qantas has said it will split its international and domestic operations into two separate divisions as it looks to restructure its business.

The firm said the split was aimed at cutting costs and streamlining its efforts to make its international operations profitable.

Its international division has been making a loss amid volatile fuel prices and falling demand.

On Monday, the firm cut 500 jobs in its maintenance and engineering division.

"Qantas International, a great airline with a rich history, is loss-making and does not deliver sustainable returns," said Alan Joyce, chief executive of Qantas.

"However, we are committed to turning it around through the five-year strategy we announced last year, based on flying to global gateways, deeper alliances, smart investment in product and disciplined capital management."

'Clear separation'

Because the carrier's international operations have witnessed a downturn in the past few years Qantas has announced its withdrawl from various international routes this year, including the Singapore-Mumbai and the Auckland-Los Angeles routes.

However, its domestic operations have been growing as it continues to enjoy a substantial market share.

Start Quote

Separating the management of Qantas International and Qantas Domestic will ensure that we can independently run each business according to its specific priorities and market conditions”

End Quote Alan Joyce Chief Executive, Qantas

"For the last couple of years there has been a clear separation in the paths that its domestic and international operations have been taking," Siva Govindasamy of Flight Global told the BBC.

Mr Govindasamy explained that since the two divisions had seen contrasting fortunes, they now face a different set of challenges going forward.

Airline experts believe that the international operations need to concentrate on attracting new customers, competing with international carriers and ensuring that they fly on the most in-demand and profitable routes to make the division profitable.

However, on the domestic front, the airline must ensure that it maintains its dominant position and fight potential competition from low-cost carriers, a view echoed by Qantas.

"We cannot be complacent - we must continue to offer customers the best network, frequency and flying experience in the domestic market, and find new ways to earn and reward their loyalty," said Mr Joyce.

Mr Joyce added that "separating the management of Qantas International and Qantas Domestic will ensure that we can independently run each business according to its specific priorities and market conditions".

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.